That Was the Two Weeks That Was

Making Sense of the New York Auctions

San Francisco Chronicle

“People were ready for the worst, but the worst didn’t happen,” said Muller, who opened his gallery in 1979 and specializes in modern and contemporary works and the Russian avant-garde. “The works that sold either went at or below the low estimate.” [ . . . ]

“Everybody is concerned about what is happening,” said Rena Bransten, who opened her gallery in San Francisco 30 years ago. “I’ve gone through this before, but this is so different because it’s global. And, part of being a dealer is not only selling art but supporting your artists.” [ . . . ]

“We’re seeing a correction whose time has come,” said Gretchen Berggruen, co-owner of the John Berggruen Gallery in San Francisco, which opened in 1970 and specializes in 20th and 21st century American and European art. “What is still selling is work that doesn’t have an overblown sense of fashion, and by that I mean that the artist is young, ‘everyone’ has to have his work, and you’re lucky if you can get it for $150,000. It’s now more about finding very good quality work at a fair price. People have had to become more realistic.”

The Guardian

One thing that distinguishes this ostensible art crash from the last one in 1990–91 is its range. No one emerges unscathed from this financial catastrophe. The global financial crisis had a more localised effect 20 years ago, centred around London and New York, at least insofar as the art market was concerned. But that was then, and this art world is a much more equitable, global place. It’s unclear who would emerge to support the art world in a rough spot. The Emirates? Europe? Many have predicted that the Russians will descend upon Art Basel Miami Beach in December, a final surge against the notion of a crash. Yet a falling commodities market that buoyed Russia, the depreciation of the ruble and trouble for the oligarch class would suggest that this hope is illusory.

Art + Auction/ArtInfo

“It was the same as the other two auctions,” quipped Edlis as he exited the salesroom after the 50-minute auction. “Everything was 40 percent off, just like at Barney’s.” [ . . . ]

Though the numbers seem tiny when compared to the lots at giants Christie’s and Sotheby’s evening sales, auctioneer and chairman Simon de Pury made the significant point that, “We certainly were the only auction house this week to make any money.” [ . . . ]

De Pury was referring to the heavily guaranteed kit at his uptown rivals, which both lost millions on their poorly timed market bets. [ . . . ]

“In hindsight,” said Phillips’s contemporary head Michael McGinnis, “not giving guarantees was the right strategy in this economy.” Speaking to future sales, McGinnis said, “We need to tighten volume and get tough on lowering estimates and reserves,” which he pegs at a jaw-dropping 40 to 50 percent of current estimates.

The New York Times

Late Friday afternoon Sotheby’s, the a public company, reported that it had lost $28.2 million from guarantees at its contemporary art auctions last week. That brought its total losses to about $52 million this fall, all from guarantees. Executives at Christie’s, which is a private company and therefore not obligated to release its finances, also admitted to having lost millions of dollars

Guarantees like these may seem like folly today, but at the time auction house experts were concentrating on collectors thought to be interested in specific works. That was in the summer. By November the trophy hunters — Russian oligarchs and oil-rich Middle Easterners as well as Americans — had for the most part fled. So had many Europeans who embraced the New York auctions a year ago when the weak dollar made their purchases seem comparatively cheap. [ . . . ]

In their place were seasoned collectors who sat out the boom years and were now returning for what seemed like bargain prices. The Los Angeles financier Eli Broad, for example, could be seen near the front of the Sotheby’s salesroom last week and bought more than $8 million worth of art by Jeff Koons, Donald Judd, Ed Ruscha and Robert Rauschenberg at an auction he called a “half-price sale.” [ . . . ]

“The jpeg market is over,” Mr. Meyer said. “We’re getting back to selling art you really have to look at.”

The New York Observer

Just a few weeks ago at the Whitney Museum gala, Ms. Boone told us that in 1989, shortly after the 1987 market crash, only 20 percent of the artwork being put up for auction was selling. And while this week’s auction at Sotheby’s and Christie’s seemed somewhat disappointing–68 percent of the offerings sold at Christie’s on Tuesday–Ms. Boone pointed out that the figures were rather encouraging in comparison.

“I don’t think they were underwhelming at all. Actually, they went better than I thought,” said Ms. Boone. “People who remember the early part of the ’90s are able to embrace what’s happening now more quickly. It’s just about how to handle it to reduce the panic.”

“All I can say is, when 1989 hit, I had a very beautiful [Cy] Twombly, an extremely important Brice Marden painting, and a 1966 Agnes Martin, all of which were losing value by the day,” Ms. Boone recalled. “Everyone kept telling me, ‘Sell them! You can at least break even, but I was stubborn and determined not to just break even. I ended up waiting a year and a half and selling them for half. So now, people realize that it’s either you decide to stay in it for 10 years or sell right away.”

I’d call the above results from the recent spate of sales at Sotheby’s and Christie’s in New York nothing short of a parting of the sea. Not to mention that the day sales, packed with work of wildly varying degrees of quality, sold relatively well. [ . . . ]

While you are all snickering to yourselves that the art market is finally getting its comeuppance, don’t forget it is the likes of traders and hedge-funders that proved capitalism a failure; artists have yet to appear with hats in hand asking for money.

Moreover, the days of hot shots moving money from one corner of a room to another and making loads in the process is most definitely gone. And the same could be said for the art “flippers” who move art from one storage facility to another without so much as cracking open a box.